Xi unveils opening-up measures in Shanghai

President Xi Jinping and his wife, Peng Liyuan, lead guests attending the China International Import Expo to a welcome banquet in Shanghai on 4 November 2018Credit:
XU JINGXING/CHINA DAILY

14 November 2018 • 4:00pm

President highlights commitment to promoting common growth

Chinese president Xi Jinping announced a number of measures on 5 November 2018, including reduced tariffs and easier market access, that aim to promote common growth and build an open global economy.

In a keynote speech at the opening ceremony of the first China International Import Expo in Shanghai, President Xi set out China’s plan to boost economic openness and called on the world to promote free trade and facilitate investment.

The expo, which will be held annually, demonstrates to an international audience that the country’s economy is no longer purely the “Made in China” manufacturing powerhouse of recent years but is now driven by consumers who want to buy what the world has to offer.

Against a backdrop of increasing international trade tensions, it is also aimed at demonstrating that China is open for business as the country marks the 40th anniversary of reform and opening-up.

Mr Xi said that in the next 15 years the value of China’s imports of goods would exceed $30 trillion (£23 trillion) and of services $10 trillion, in step with the increasing demand of Chinese people in pursuing a better life.

China’s initiative to expand imports is not temporary, but a long-term plan to embrace the world and the future while promoting common development, Mr Xi said. Businesspeople around the world are welcome to share the development opportunities of the market in China and its huge population of 1.3 billion, he added.

China will not stop its effort to pursue higher quality opening up. China will not stop its effort to pursue an open world economyPresident Xi Jinping

China is taking solid steps to expand financial opening up, continue to advance opening-up in the service sector and deepen opening-up in agriculture, mining and manufacturing. The country will also accelerate opening-up areas including telecommunications, education, medical treatment and culture.

Mr Xi said: “China will not stop its effort to pursue higher quality opening up. China will not stop its effort to pursue an open world economy.”

He called economic globalisation an irreversible historical trend that provides strong momentum for world economic development.

Mr Xi said a fully optimistic attitude is justified towards the prospects of China’s economic development despite the challenges of rising uncertainties and some companies’ business difficulties. “The Chinese economy is not a pond, but an ocean,” Mr Xi said, and heavy winds and storms “may overturn a pond, but never an ocean”.

The world is facing the challenge of rising anti-globalisation, Mr Xi said, adding that all countries need to acknowledge that openness and collaboration are the engines of global growth and vitality. He proposed that all countries push back against protectionism and unilateralism to build a more connected, fair, transparent and inclusive world economy.

Measures he announced in April on relaxing market access have been implemented, Mr Xi said. China has further simplified the negative list for foreign investment, reduced investment limits and lifted the level of free investment.

Mr Xi said China would foster a world-class business environment, and he promised to accelerate legislation in foreign-investment law and protect the legitimate rights and interests of foreign-invested companies.

WHAT THEY SAY: INTERNATIONAL BUSINESS EXPERTS ON CHINESE DEVELOPMENT

ROBERTO AZEVEDO, director-general, World Trade Organisation.
“It [the expo] reminds us of the essential truth that trade is not a zero-sum game where exports are good and imports are bad. In fact, imports mean greater choice for consumers at lower prices. They mean you can focus on producing those goods where you have a competitive advantage, and they mean having a more competitive and more efficient economy.”

CHRISTINE LAGARDE, managing director, International Monetary Fund. “By transforming itself through trade, through hard work, also learning from others, China has helped transform not only itself, but also the global economy. Progress in this country has played a significant role in boosting productivity [and] boosting innovation. . . and living standards in countries around the world.

JIM YONG KIM, World Bank Group president. “By embracing reforms and openness in its development model, China has increased its per capita income 25-fold, and more than 800 million Chinese people have lifted themselves out of poverty.

Every country should strive to improve its own business environment and solve its own problems, he said.

Mr Xi outlined China’s planned measures to fully leverage Shanghai’s role in opening up, including setting up new districts of the China (Shanghai) Pilot Free Trade Zone and establishing a science and technology innovation board at the Shanghai Stock Exchange.

The expo shows China’s innovative ideas and actions to support the multilateral trading system and promote free trade, Mr Xi said.

Before the opening ceremony the president met foreign entrepreneurs and said that China will continue to provide a good environment for global investors.

About 300,000 visitors were expected in Shanghai for the six-day event, with the participation of more than 3,600 companies, including 200 from Fortune Global 500. Leaders of 18 countries also attended.

Sherri He, a partner of the management consultants AT Kearney’s Shanghai office, said it is probably the biggest import-related event ever staged. The scale of the Shanghai expo is much greater than that of the Canton Fair, which has been held twice a year in Guangzhou, Guangdong province, since 1957. “That would be a comparison point, but that [the Canton Fair] is for both imports and exports,” sais Ms He. “This [the Shanghai expo] is probably the first-ever global import event.”

Domestic demand in China continues to grow faster than in the rest of the world, which means imports are going to be increasingly pulled in by ChinaLouis Kuijs, head of Asia Economics for Oxford Economics consultancy, Hong Kong

The exhibitors include a wide range of companies, from those showcasing their expertise in high-end technologies such as industrial robots, machine tools, artificial intelligence and advanced healthcare, to those selling food and luxury consumer goods.

The main goal for some is to get close to the Chinese middle-class consumer, whose growth in terms of numbers is set to be one of the global economic megatrends of the coming decades. The global management consultant McKinsey & Co says the country’s middle class could increase to 630 million by 2022, almost double the current US population of 327 million.

China’s imports are now an important driver of the global economy, with the world’s second-largest economy also being the second-largest importer of goods for nine consecutive years, making up 10.2pc of global imports last year.

China’s imports of goods last year rose to $1.74 trillion, up 16pc on the previous year, whereas its exports rose 11.4pc to more than $2.21 trillion.

Louis Kuijs, head of Asia Economics for the consultancy Oxford Economics in Hong Kong, said the rebalancing away from exports towards consumption is one of the most important economic trends globally: “Domestic demand in China continues to grow faster than in the rest of the world, which means imports are going to be increasingly pulled in by China.”

Its surplus with the rest of the world is disappearing, Mr Kuijs said. He forecast that the current account surplus of 1.3pc of GDP last year will fall to just 0.1pc this year and may soon even become a deficit. “If it happens, it will be a milestone, and a lot will be written about it,” Mr Kuijs said.

“China already has a deficit with some economies and countries in Asia which are part of China’s Asian supply chain involving imports of large volumes of components. It also imports raw materials from countries like Australia.

“Increasing imports will mean that its current overall surplus will disappear.”

Leon Wang, executive vice-president, international, and China president at AstraZeneca, the British pharmaceuticals multinational, which is an exhibitor in Shanghai, said: “At a time when China is celebrating its 40th anniversary of reform and opening-up, it is of greater significance for the country to host this international event in Shanghai.

“It shows not only the rise of China under this policy, but also presents a national image that it is open, inclusive and reciprocal.”

This article was originally produced and published by China Daily. View the original article at www.chinadaily.com.cn